Exchange rate pass-through to domestic prices
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Exchange rate pass-through to domestic prices does the inflationary environment matter? by Ehsan U. Choudhri

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Published by International Monetary Fund, IMF Institute in [Washington, D.C.] .
Written in English


  • Foreign exchange rates -- Econometric models.,
  • Pricing -- Econometric models.,
  • Inflation (Finance) -- Econometric models.

Book details:

Edition Notes

StatementEhsan U. Choudhri and Dalia S. Hakura.
GenreEconometric models.
SeriesIMF working paper -- WP/01/194
ContributionsHakura, Dalia., International Monetary Fund., IMF Institute.
The Physical Object
Pagination35 p. :
Number of Pages35
ID Numbers
Open LibraryOL19296712M

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Exchange rate pass-through is shown to be incomplete. Import prices, nevertheless, respond quickly to an exchange rate change, where some 80 percent of such a change is passed onto prices of imports within 12 months. The corresponding figure for producer prices is 28 percent and for consumer prices 8 percent. Title: Excfhange Rate Pass-Through to Domestic Prices: Does the Inflationary Environment Matter? - WP/01/ Created Date: 12/12/ PM. Jonathan McCarthy, "Pass-Through of Exchange Rates and Import Prices to Domestic Inflation in Some Industrialized Economies," Eastern Economic Journal, Eastern Economic Association, vol. 33(4), pages , Fall.   It is emphasized that 72% of improvements in inflation comes from exchange rate. 3. The Model and Data Set In this study, the model in Leigh & Rossi ()’s study is taken as a reference. The model used in the estimation of pass-through effect from exchange rate to domestic prices depends on VAR approach with five variables.

This paper investigates the size and nature of exchange rate pass through to import prices for a panel of 14 emerging economies. We firstly set out a stylized model in which import prices are. Exchange Rate Pass-Through refers to the change in domestic prices that can be attributed to a prior change in the nominal exchange rate (Aliyu et al., ). It is also generally considered as the extent to which changes in exchange rate are reflected in the prices of.   Exchange rate pass-through – the degree to which exchange rate movements are transmitted into imported prices and then on to consumer prices – is also of clear importance to monetary policy as it measures how much of exchange rate movements are reflected in domestic prices, and hence, short-run inflation.   All else being equal (assuming no other costs and only taking exchange rates into account), the price of California almonds in Canada would increase from about C$ (i.e., approx. US$7 x

to nal consumer prices is commonly referred to as \exchange rate pass-through" (ERPT).1 Assessing the degree of pass-through to import and domestic prices is particularly important for the conduct of monetary policy, as the exchange rate channel is one of the transmission channels. Exchange Rate Pass-Through to Domestic Prices in Uganda: Evidence from a Structural Vector Auto-Regression (SVAR) Thomas Bwire. 1, Francis L. Anguyo and Jacob Opolot. Abstract. This paper examines the degree of exchange rate pass through to inflation in Uganda with quarterly data over the period Q3 to Q2 using a. "Pass-through of exchange rates and import prices to domestic inflation in some industrialised economies," BIS Working Pap Bank for International Settlements. Jonathan McCarthy, "Pass-through of exchange rates and import prices to domestic inflation in some industrialized economies," Staff Reports , Federal Reserve Bank of New York. First, changes in import prices being ultimately passed-through to domestic prices, the degree of exchange-rate pass-through is of key importance for central banks. Second, the elasticity of export prices to exchange rate changes is a central element in the measurement of price competitiveness, which in turn affects net exports and real activity.